Lender may check credit report after car is repossessed


Dear Experian,

Why is my old creditor pulling my credit report? I had a car that I could not afford after being laid off. I ended up giving the car back and my account was charged off. I have no open accounts with them, so why are they pulling my credit report one year later?


Dear CLU,

Typically, when a car is repossessed or voluntarily surrendered the lender will sell the vehicle to recover some of the debt. However, the amount they receive for the vehicle at auction is often not enough to cover the full amount of the loan. If it is not, you are responsible for any remaining balance.

Because you still owe a debt to the creditor, they have a legal right to check your credit report, and to use information in your report to assist them in any collection efforts.

The term “charged off” simply means the creditor has written the account off as a loss. However, the lender may still attempt to collect the remaining balance or transfer the amount to a collection agency.

Thanks for asking.

The “Ask Experian” team

Our policies for Ask Experian:

The information contained in Ask Experian is for educational purposes only and is not legal advice. You should consult your own attorney or seek specific advice from a legal professional regarding your particular situation. Please understand that Experian policies change over time. Posts reflect Experian policy at the time of writing. While maintained for your information, archived posts may not reflect current Experian policy. The Ask Experian team cannot respond to each question individually. However, if your question is of interest to a wide audience of consumers, the Experian team will include it in a future post.